YOU NEED TO HAVE PASSION TO STAY IN THIS BUSINESS

THE PECULIARITIES OF ITALIAN FAMILY BUSINESS ON THE EXAMPLE OF A «HIDDEN CHAMPION» –EURORICAMBI COMPANY

In the publication «INVISIBLE LEADERS» («Vedomosti — Financial Times and The Wall Street Journal», 05.12.2006, No. 229 (1756)) Andrew Kuzmichov wrote about the book «Hidden Champions», written by German researcher Hermann Simon. Simon has spent over 20 years studying the activities of small and medium-sized world-class companies. At the core of such firms, according to the Professor, is strong leadership, “which sets ambitious goals, which in turn define and drive internal competence of the firm”. Into the inner circle he placed “carefully selected and motivated staff, continuous innovation in product and service, as well as relying on the company’s own resources.” In the outer circle, according to the author, is “narrow market focus (relating to product/technology/application), proximity to the client, a distinct competitive advantage” and global orientation. Another feature of such companies is their average age (65 years). The oldest firm champion has been founded in 1753, and 7.6% of “hidden champions” are over 150 years old. Many of these firms have a global market share of 70-90% – items can be reached only by large multinational firms. Remarkably, 76.5% of the firms identified by Simon, are «family enterprises». Our expert and partner Dmitry Danshov, «Mehanika» Company Group’s General Director introduced us to Riccardo Vaccari, Are Sales Manager of Italian «hidden champion», family-owned company Euroricambi, engaged in the development and production of components and spare parts for transmissions, gearboxes, axles, differentials. Interviewing Dmitry Danshov and Riccardo Vaccari, we tried to find out how the «hidden champion» concept, according to Simon, corresponds to a real Italian company.

THE COMPANY IS LARGE AND BEAUTIFUL, EQUIPPED WITH ROBOTS AND HIGH TECHNOLOGIES

Dmitry Danshov: Well, the Euroricambi company… it is 37 years old, founded by Signor Taddei. It is a typical family business with a technically complex activity. Euroricambi produces components and spare parts of the transmissions. Manual gearboxes, main gears, axles, differentials…

These are elements of automotive, off-road machinery, lifting, construction, agricultural and special equipment. The production of such items requires sophisticated technology and a huge fleet of modern equipment. Euroricambi delivers its products both to the auto market and conveyor manufacturers. The product quality meets the OE quality standards (original equipment, original components – G. B.).

The company has the largest, high-tech, robotic lines, with serious instrumental production. Complex technologies of hardening, surface treatment, wear-resistant coating are applying.

Distribution warehouse is robotized. The number and the geography of delivery is vast, the range is wide, so distribution warehouse is a separate high-tech. Storage of workpieces as well as materials is a rather complicated process. Variations of workpieces is not much less than the range of products. Therefore, the storage and logistics of semi-finished products are arranged on movable racks. Racks are automatically moved along the rails, opening access for forklift to storage locations, in accordance with the items in the picking list.

Racks are located in the right place, the truck stops, takes out a container weighing up to 1 ton , then a warehouse worker takes out the parts in accordance with the picking list.

Photovoltage batteries are set on the roofs of industrial buildings. Solar electricity is a complex issue. Such projects do not pay for themselves immediately. Specialists on alternative energy sometimes call their activity the sort of «banking business» – that is, they work where there are subsidies as well as targeted funding – because «green» energy in a fair fight competing with conventional thermal power plants unfortunately loses. But Euroricambi possess this sort of equipment. At the entrance of the main factory a beautiful screen is hanging, which shows how much electricity has the workshop produced and how it was spent: either dropped on the grid or used for internal needs. Technological equipment of the company is actually modern. The required accuracy of manufacture and the complexity of the products are very high. A complex heat treatment, surface hardening, high precision and complex geometry of parts produced require its own research center, design office, tool production and very expensive equipment in the main production.

OH NO, NO! YOU ARE SIGNOR TADDEI’S GUEST! WHAT MONEY ARE YOU TALKING ABOUT?

Dmitry Danshov: Once in five years, Signor Taddei personally invites all his partners and clients to share a gala three-day celebration. Costumes, ties, evening dresses, fireworks and music – everything is in true Italian style. True Italian panache. And Italian courtesy.

Segnor Taddei and his wife

The accepting party called in advance and reminded: «Olga (Dmitry Danshov’s wife – G. B.), if you are planning to do your hair for the celebration, we will help you to reserve a hairstylist in advance. It is Saturday – here, in Italy it’s impossible to get to the hairdresser without reservation on Saturday, especially if the hairdresser is a good one…». Such details are of great importance for the host side: a particular dress code, getting to the party in time. Attempt to pay at the hotel for a cup of coffee, a glass of wine were flatly rejected: «Oh no, no! You are Signor Taddei’s guests of! What money are you talking about?»

At party. Segnor Vaccari is standing, Mr Danshov and his wife to the right of him

Very interesting crowd is usually gathering at the Euroricambi festival. Businessmen from all over the world, all continents and countries. For example, Iran is a major partner. This is a very powerful market. This is an example of how standardized, single-brand equipment fleet used in the country, provides excellent results. Because there is no circus and clowning, such as when one company uses a lot of similar equipment from different manufacturers. Just imagine – one forklift is Mitsubishi, another loader – Kubota, the third is CAT, fourth is… whatever. Such park is usually bought by financiers. Reasons are as such: «which leasing is cheaper today». In the operation such park, which consists of heterogeneous machinery, is rightly called «zoo.» In Iran, on the contrary, everything is uniform and standardized, the operating time of equipment is longer, but costs of supply repair and much lower than in «civilized» countries. There is a historically constituted, or, in other words, wisely planned unification of the machinery, both freight and special, in Iran. Very reasonable industrial guys are working there in Iran. For Euroricambi Iran is a very serious market.

YOU ARE SPEAKING TO A CLANSMAN

Dmitry Danshov: One more feature is worth mentioning. When communicating with any other company, you are speaking, maybe, with a very nice person, but his powers are limited by the position listed on his card. In the case of Euroricambi you talk with a representative of the clan. And every word pronounced by Mr. Riccardo is said on behalf of the clan, personally on behalf of Signor Taddei. Therefore you can trust these words completely. If an agreement was reached, there is no necessity to write it on paper. One adult male said, the other adult male accepted his point of view. This approach is very Italian and very Russian. In Russia until 1917 as well as in Russia after 1991 the matter of «responsibility for one’s word» is accepted and adopted very well, seriously, responsibly. Unfortunately, this principle doesn’t work with large international concerns, regardless of my respect for them. Because there is a bureaucratic superstructure, and the arrangement between people involved in some case can strongly be distorted, while passing the process of registration, approval, confirmation, somewhere in the distant top. And in case these uppers reside in a mysterious distant land, then coherence, continuity and permanence of agreements can be distorted to a certain extent.

The Supreme guide, while in his «headquarters» and looking at the globe, thinks: «Oh, Russia is such a big country!» Carefully measuring its vast area, they conclude about the volume of sales and its expected constant growth. However, the fact that it is better to compare not with square kilometers, but with the amount of equipment in operation is rarely made clear at the top – for they seem to have their own KPI to be raised, for example, by 15%. But further rise is impossible – our planet appears to be too small for global companies …

IT WAS TOLD TO BUY TWO COMPETITORS, ONE WE BOUGHT, BUT ANOTHER STILL CAN NOT BE FOUND…

It happened once in Federal Mogul company: big bosses (who usually use their personal planes to fly to Frankfurt every two years) were sitting and mourning that for some reason this year in Europe their plans were not fulfilled. «It was told to bribe two competitors, one we bribed, but another still cannot be found.” “But why not? There is no money?” Oh no, we’ll find the money – in extreme case, we’ll borrow them somewhere.. We are bankrupt, so why not take more? The fact that we’ve bought up all our competitors, with no one left to buy. But the company’s plans approved are to buy two!» Here is an example of financial and administrative idiocy of big corporations. From the height of his «ivory tower» they can’t see, and even worse, they can’t understand what is actually happening below, that is on the market. Fortunately, Euroricambi is free of this shortcoming. I would very much like to wish prosperity to this company, because it is one of the last “holdouts”. For example, a family company Goetze was once bought by Federal Mogul, the family company Victor Reinz does not now belong to the Reinz family, but to Dana Corporation, KolbenSchmidt does not belong to Schmidt family, but to Reihnmetall corporation. The Italians are certainly strong in the small and medium business, which accounts for 70-75% of the economy. I would like this island of “oldschoolness” to be preserved – where talking to a person, you know that the ghost of vague bureaucratic superstructure doesn’t loom behind him, neither the mythical shareholder, a beneficiary that is unknown and multifaceted, whose presence is felt in the air, but in real life it is not. And who, in the end, really makes decisions and what logic he is guided by – it’s impossible to understand. Working with Euroricambi, we understand who our partners are and what their goals and values in business and «life». On the contrary, when working with Euroricambi, we understand who our partners are and what are their goals and values in business and «life in general».

The lack of corporate separateness is also very important. Riccardo Vaccari is responsible for a large region including all Eastern Europe. It is not a secret to anybody that the goods flow from Russia to Ukraine, Belarus and other countries. It is possible to harmonize relations between dealers in different countries only in presence of some serious, competent and fully empowered person. Now I mean Mr. Riccardo Vaccari. In large corporations one person is responsible for Moldova, the other – for Russia, the third is responsible for Ukraine or the Baltic States. But the markets mentioned are correlated. And the product sold in Moldova may accidentally emerge in Moscow and in St. Petersburg. If a corporation is involved, no one will deal with such cases, saying: ‘It’s not my territory”. In the case of a family company the approach will not be formal, but realistic: we need order, we need progress, development, strong relationship. But for corporation with public capital relevant indicators are necessary, for they are incorporated in the plan and are considered as KPIs, because general bonuses, based on these indicators, are paid to some guys who arrive to have a talk on a private jet. «I came down here to see you from the sky… wow, interesting, tell me, what are you doing here?»

Andrei Kuzmichev (AK): Are there now in Europe some other family corporations, in addition to this?

Dmitry Danshov (DD): A very small number of independent companies are left. Some signs of the family company the BERCO still preserves, but, alas, there are only echoes of bygone achievements. Because it belongs to the Krupp company now, and they are forced to act as a Corporation. There is one small company, it has always been a family one, and there is a chance that it will be transferred by inheritance – it is a company NEPA which belongs to Mr. Nepan Pavkovic – the specialty of this company is manufacturing honing equipment. He talks about sanctions: «Yes, honing is used for the production of guns as well. Guys, but I have 12 orders from Russia, but I’m not allowed to ship them. What can we do?» We offer: «Mr. Pavković, please, do change tooling, adjust the head of caliber of 125 mm to 121 mm or 128mm, that is, a size other than artillery calibers, and we’ll easily remake them for a size 125 mm to satisfy your customers. If it is approved, or, in other words, allowed, we’ll manage it easily here.» But this is just hooliganism. Perhaps it is also worth noting Serbs – the “Red partisans factory ”. It broke into pieces. One rather large piece called «Vintili» – it is a family company, the first generation, because capitalism in Yugoslavia has occurred simultaneously with the war during the life of this generation. In Spain there is AJUSA company, which has the characteristics of a family business. There are also private repair businesses, but they are not really an industry – they are much closer to services.

Probably, there are some family companies in Germany, too. But the area of automotive components and auto market is characterized by large production volumes, so it is difficult to resist and not to be absorbed by a large Corporation. Belgium, the Netherlands and Scandinavia have powerful private repair companies, but it is difficult for me to define some family-run manufacturers of automotive components.

IF THERE IS NO FAMILY BUSINESS, THE FAMILY WILL ATOMIZE

Gregory Baev (GB): What keeps Euroricambi from becoming the part of the Corporation?

Dmitry Danshov: I think that such old-fashioned thing as beliefs still exists. It’s not only an opportunity to earn money. Every generation of heirs may sell the business at any time and enable themselves to do nothing and live in full prosperity to the end of his days. But what is bad in doing nothing? It is impossible to drop everything and go to rest. Family business is a lifestyle that is maintained for a long period of time, a system of relationships within the clan, it is what unites Signor Taddei with his grandchildren, nieces and nephews.

AK: How long have you been cooperating with Euroricambi?

DD: About ten years. The first meeting took place at the exhibition, it was on the recommendation of our partners. For us it was the first outing for the propulsion theme. We existed in the narrow space of the «pulley to the flywheel», but only inside the motor, and no more. It was our first experience of dealing with the transmission, and it was successful. And now, thanks to solid partnership with the Euroricambi family company, their products remain one of the few reliable product ranges. All other brands are chasing for volume sales today, but in such case you need to sell to any stall on any conditions, because the new year needs to show some growth. But such kind of approach collapses the distribution chain and the prospects for long-term cooperation as well. Any manager in an international company, no matter how reasonable and honest he may be, is pushed by utter necessity to perform the plan at any cost – in other words, to take Berlin by may 1. Accordingly, he must do dirty things to lure customers from other dealers, lie, break commitments, that is, to do all what is taught to sellers at various «multilevel marketing» and shameless trainings of «effective sales». As a result, he sells to one company, while he needs to sell to five, costs rise, worries grow… sales, too, at some point are growing up, and then it turns out that the distribution network is not interested in this product: it gives you the opportunity to earn at least to cover costs. Today, before our eyes, this happens with products of all “The Big Three”, the names will not be called. We love them, we appreciate their contribution to the history of world automotive industry, but now at the market of spare parts for us – along with them –very difficult times are coming. We will survive, but something within the global sales system will change dramatically. How exactly, I can only presuppose. Large public companies focused on immediate growth and having a short planning horizon will start on the knockout game at the market. In country after country, the Manager with the planning horizon «up to the end of the year, until bonus» is responsible for business, and on the top of the command pyramid is a Bank financier cut off from the life. Tell me, which one is able to plan the development strategically? The answer is obvious – neither the first, nor the second. Such idiocy on the part of family companies is utterly impossible. As ‘Mehanika’ Group of Companies we are ready for any development, and we have fangs and claws, and turtle armor, and hooves, and tusks also. There are workshops, there are departments of retail sales and wholesale trade, manufacturing, design office. We possess all the components, and if the part of them will sink, the remaining part will compensate for the fall. And what about the company that came here with a mission, which has a top-down plan to be fulfilled under any circumstances? Well, it will manage somehow this year, but what about the next one? Because it was managed by spending next year resources. I sympathize sincerely with the guys who work in the offices of international companies, because they often face impossible tasks, which can be performed only by guile and not very nice behavior. Well, one year they can manage. And what about the next year?

In short, I propose to consign to oblivion (or anathema) all the rubbish about foreign investments, about IPOs, «venture capital investors» and all the other elegantly named forms of begging or fraud. Work 12-16 hours a day and make efforts to improve the business climate. And then Russian companies similar in ideology to the goals and values to today’s Euroricambi will appear. Those who’ve read all this, please click on the link «hurrah!» for sometimes I think that there are only few who are reading. Thank you. Perhaps the most persistent will be able to develop such companies in less than 37 years. Wish them good luck!

Riccardo Vaccari (RV): My father is a professor at University of Bologna, my wife is a professor, my cousin is a professor. So I’m quite used to academic sphere.

DD: Research field of my colleagues are family companies. Family companies have many advantages. There is a book “Hidden Champions” by Hermann Simon describes such companies. Since Euroricambi is one of the biggest and most successful examples of family companies, I’ve decided to introduce you to my Bauman colleagues.

RV: Before we go directly to the questions, I’d like to give you the picture of economic situation of Italy and the structure of enterprises in Italy. I studied economy at the University of Bologna so I am a bit familiar with this information. As you know Italy is divided in two parts. The northern part which is very industrial and the southern part which is a bit less industrial. In northern part the strength of Italy is supported by small and medium sized companies, which are actually family companies. Family company means that simply an artisan, a small artisan like mister Taddei, the owner of Euroricambi, starts a company. A small artisan employ another small artisan, and starts doing its job by himself. He took one man to help him, then two, three. Now our group is composed of about 700 people, 6 different companies and turnover of 150 million Euro. But all these were created of nothing. The main difference in economy structure in Italy and in Germany is the medium size of the companies. In Italy there are a lot of very little companies devoted mainly to export, staff up to 50 people, medium up to 250.

GB: Let me introduce our University. It was found in 1830, quite old, but not as old as Bologna University. In our university Russian system of shop-work instruction was founded. We published a reprint by MIT second president John D. Runcle “Russian system of shop-work instruction” of 1876 year in an almanac. MIT based its curriculum on this system. Bauman university traditions are based on dual education, that it should be based both on theory and practice. The first course on production management started at our university in 1904. And in 1911 our professor Czarnowski published world’s first textbook on management called “Organization of industrial enterprises on metal processing”. We would like to present a reprint of this book during our next meeting. Let’s move on to questions.

Your company was found in 1979. And it all began as one artisan met another artisan?

RV: So, there is a Technical School Aldini Bologna. To be honest, there are two such schools, one in Bologna and another in Modena. Most of the graduates of this school have become engineers. My father, a professor of engineering at Bologna university, always told me that to get a job and teach at this school, it is much more difficult than working at the university. In consequence of this, the students of this school received an excellent education, especially in technical sciences, as they were getting a lot of practice, much more than in higher education. Mr. Taddei graduated from high school in Modena. That school had released the majority heads of technical departments, such as Ferrari, Lamborgini, Ducati . In 1979, Mr. Taddei engaged in business for the past 5-6 years, first of all he had a small share of the company, which now is our competitor, but at that time he was forced to resign. So in 1979 Mr Taddei with a small amount of money started.

GB: Could you tell us about the main stages of development of your company in 1979?

RV: In 1979, our company was located in Italy (Bologna), by the end of 1979 the company employed 5 people and total area was 1000 sq m. In 1983 a new building was built and the number of employees in the company had reached 30. In 1995 we built a new plant with headquarters building where we are staying now, total area of 14 000 square meters. In 1997 we started the Eurotec, a company took care only of Italian market, by that time it was our main market. Now we are selling 97 percent of our products abroad, and 80 percent of products are bought outside of the European Union. That’s why we survived last five years. In 2002 we opened a new workshop. Until that time, we could not carry out a full cycle of product manufacturing. And now we cover all the stages. Also we build a perfect warehouse of new generation. In 2009 new logistic premises were built, 10000 sq m. And in the past year, the area was doubled. In 2010 we bought the Antonio Masiero Company. Mr. Taddei is a very romantic person. And there is a difference between family companies and corporations. Family companies usually have one person who is a heart of the company. And the reason why Mr Taddei bought Masiero company (there was a lot of reasons for not doing it), that it has a big history and reputation, and very professional staff in cutting gears. So Mr Taddei didn’t wanted them to leave the business on their old so he invested money to buy company and spent a lot of money to renew it completely. And I’m happy to say that after two years of reanimation Masiero makes money again. Mr Taddei is a rich man, but all the money he made, he puts in the company.

GB: You’ve shown us quite big changes between lifecycle stages. For example, doubling the wearhouses, buying new companies. Mr Taddei invested his own money or he used credits? Did he ever ask money from somebody?

RV: He used only its own money. Only from his pocket. He hasn’t asked money from anybody. Yes, he buys equipment using leasing schemes. But he invests only his own money.

GB: Is it a principle of the company?

RV: Yes, it’s a principle of the company. There is a long line of bankers in front of our company who are willing to keep money in Euroricambi. Because we are really well known in Bologna as extremely punctual company to pay to our suppliers, employees, without any delay. We have very good financial results.

GB: Why Mr Taddei refused to take credits?

RV: Because he probably doesn’t need it and he prefers to work on his own.

DD: Henry Ford told “I determined absolutely that never would I join a company in which finance came before the work or in which bankers or financiers had a part.”

GB: Could you describe the problems which Mr Taddei and his team had to solve to get from one stage to another? Your company is a family business. There is a Russian proverb: friendship is a friendship, but money should be apart. If you want to stay friends, don’t make business together. How you solve this problem in your family?

RV: The family has a second generation now. The father is now slowly retiring and his daughter and son are now taking over step by step. And also there is a son in law, he is a husband of the daughter, he is responsible for Euroricambi sales. I hope we would never reach the situation of some fighting in the family. In Italy we say: the first generation builds a business, the second generation develops it, the third generation destroys it. And we are now in the second generation (laughing).

GB: How Mr Taddei delegates responsibility? What happens if somebody brakes the agreement?

RV: This is a real problem in family companies. The main difference between corporation and family company, that if anything happens the family pays from its pocket. While in the public company everybody is paying. In this case this is a thing that remains within the family – all main decisions are take altogether. All members are sitting around the table with nice meal and discuss about the possibility how to develop and enlarge the business. Of course in family companies delegation of responsibility is the main problem because there is one-man company and this company becomes bigger and bigger. And the company reaches the level when founder cannot control everything as it was in the size of 10 people. When your company is bigger than 50, 100 people, you must delegate. There is a very limited group inside the company which we call “dirigenti ”, that are taking care of doing the things inside the company, taking some responsibility which used to be of Mr Taddei that he has no time anymore to follow. One of them is Masiero, where I’m Sales Director.

DD: Is it easier to delegate responsibility in the family business then in the public? Is there any difference?

RV: In my opinion it is much easier get more responsibility and grow up in a corporation than in a family company. In a family company you depend on the capacity of a single person, it’s very important the kind of relation you have with the owners. They must know you very well, they need to look into your eyes. In a corporation responsibility is given just when management needs to substitute somebody.

GB: Your company is almost 40 years. Has Mr. Taddei his point of view about inheritance? Who will inherit the company?

RV: His son is already the president of the company, so Mr Taddei had already solved the problem of inheritance. His daughter is a president of Masiero.

GB: Was it hard to prepare his son and daughter to inherit the company?

RV: In my opinion it was really easy. The son of Mr. Taddei has been working right behind the desk of his father for the last 20 years. Anything that the father was discussing, the son was listening and involved. The daughter was sitting just beside the mother and following all the administration.GB: What is the main goal of the company?

RV: The main aim of the company is to produce and sale high quality parts suitable to original gearboxes, transmissions. Euroricambi choose to serve the clients in the aftermarket with quality, availability, range with respect to them. Not just making money.

GB: I think there was a lot of offers to buy your company. What’s the reason Mr Taddei didn’t sell his company? He might have had enough money from such deal for himself, his children and grandchildren.

RV: Financial results of the company, EBITDA shows that our company is very healthy and profitable. So there were probably a lot of offers, but I’m not involved in it. So far Mr. Taddei refused such offers because of his passion, romanticism. He loves his work. You know in Italy when you have a company more than 50 people you don’t need to buy a car by yourself. The company buys a car for you and takes care of it, gasoline, service, tires etc. Mr Taddei used to buy a car using his own money from the pocket. He doesn’t want his expenses to affect the company. Practically up to now Mr Taddei used to be in office from Monday till Saturday each week. Even on Sunday morning he used to jogging inside his company. And he signs documents while jogging. And his son follows the style of work of his father. You need passion to be in this business.

GB: Could you describe the main factors that helped your company succeed?

RV: Capable people. Mr Taddei was able to attract around him capable people. The company is made by people. Also thanks to the people the company earns lot of money. And this money is reinvested into the company. And nowadays if you come to see our factories you will find latest state of the art technologies with millions and millions Euro invested every year. But the starting point was Mr Taddei choose few really capable persons around him to start the business. And during the company lifecycle there were lucky situations when one company or competitor goes into bankruptcy and you take its business or the Company itself over.

GB: Mr Danshov described the products of the company. You have very complicated production process. I think you need a lot of R&D. Could you describe R&D management system?

RV: Consider that our business is to make replacement parts, we need a lot of reverse engineering. And our aim is to make parts exactly as original. There are several exhibitions where you can go and check the latest innovations. This technologies cost a lot of money. Another way is to put inside the technology that you used to outsource in order to complete your production chain. I can talk about our latest machine we bought. It is able to make scudding which is a very fast way to cut gears. Previously this process took 10 minutes and now only two. And with much more precise, without distortion in consistency and quality. Innovations are very important in our business. Quality is not the only one important thing. You need consistency when you buy 200 pieces and they are of the same quality and dimensions. We are talking about one item which fits in complicated gearbox consisting of a lot of other pieces. And is this item fails this would be disaster which would cost you much more than buying this item 200 times. So the consistency is a capacity of a company to follow the standards. And new technologies can guarantee this capacity to follow quality and standards.

GB: As I can see your company was certified by TUV. Could you describe your production system? Do you use principles of lean production?

RV: Yes, in order to be certified by TUV we need to meet the standards. The strength of Euroricambi is the capability to make small production lots what Chinese, Indian companies are not capable or not willing to do. This is due to the kind of machines we have and our organisation. Our machines are very easy to set up. Chinese companies can produce some products of our range. But minimal lot would be 500 or 1000, and we can can make lot of 30 pieces in a very short time.

GB: You mentioned that people are the key success factor of your company. What is your human resource system, how you prepare new specialists? Do you work with universities or technical schools?

RV: Bologna is a mechanical region, and we are in the heart of Italian mechanical industry. Ferrari, Lamborghini, Maserati are located here. And there are also many packaging companies here. All the tea bags, all cigarettes in the world are packed with machines produced here in Bologna. These are also a family companies . There are plenty of technical schools, universities in this area. We are in touch with Bologna university for HR reason and in order to solve one technical problem. We usually receives CVs of graduates from Bologna technical schools.

GB: Do you have any problem with staff turnover?

RV: I should say that Euroricambi is a company with the lowest staff turnover I’ve ever seen. So people once employed in Euroricambi used to work lifelong.

GB: Why staff turnover is so low?

RV: Because we have nice ambient, the company is very healthy, which nowadays in Italy is not so common. You feel when you work inside the company that this is a strong company with big shoulders. And you can grow up there.

DD: When Euroricambi prepared there anniversary celebration, all their staff was invited with their families. It is very difficult for Mehanika to gether all its staff together.

RV: Yes, Euroricambi hires a historical villa for this party. 450 employees, all our best customers, Mr Danshov was also invited. We normally organize in every Frankfurt Automechanika exhibition (which takes place every 2 years) a party for all our best customers in Mariott Frankfurt in front of the exhibition. Every year in Automechanika Dubai we do the same in Meridian Hotel.

GB: What’s the difference between working in Italy market and worldwide?

RV: In Italy I rarely work. I have 2-3 customers there. I’m 20 years in Euroricambi and all these years I focus on foreign markets. Frankly speaking I prefer to work with third world countries. Because in such countries the relationship is much more correct and is more based on friendship and personal relations. In Italy business relations are very cold, using only numbers. In Russia I feel that the relations are similar to the Middle East. I like Russia and Russian people.

THE FINISH (AFTERTASTE)

Thanks to Dmitry Danshov for the opportunity to meet prominent representative of the Italian family business, with the «hidden champion» company Euroricambi. Just like Simon writes, the heart of the company and its inspirer is the founder, Signor Taddei, uniting talented people. As noted by Dr. Simon, «technology is perhaps the single most important factor determining competitive advantage and global market leadership of «hidden Champions». The same can be said about Euroricambi. But the better is not to speak but to follow the example of such a company.